Zimbra Poses Threat to Microsoft

    November 17, 2006

Zimbra, a low-cost email program, might be more competition to Microsoft Exchange than the company had anticipated.

Zimbra, created in 2003 in Palo Alto, California, was designed by three friends who sick of being Silicon Valley slaves. They had a vision to create an email program to rival that of Microsoft Exchange, and quite possibly may be close to achieving their goal.

Three friends, who met while working at Sun Microsystems Inc, concocted Zimbra in 2003 at a coffee shop. The team of programmers was headed up by Satish Dharmaraj, a computer scientist, and supported by Ross Dargahi and Roland Schemers.

During a meeting, the three friends decided that there was room for a new email program that would serve businesses more efficiently and cheaply than Microsoft Exchange.

Over the next few months the trio scoured the Internet for free software and began to piece together a kind of program quilt. In a few months time they had managed to piece together over 40 software programs into a basic email system. By February of 2003, they released the program and a very competitive price and soon began to garner Microsoft’s business.

Zimbra’s program itself is comparable to Microsoft Exchange, in that, it allows business employees to send, receive, store, and search through the numerous emails businesses receive daily. To date, there are about 4 million Zimbra users, and that number continues to grow.

Microsoft does not seem to be threatened by Zimbra’s number of users; they have 140 million. Microsoft founder Bill Gates said, “They’ve done a good job,” but says the product “doesn’t even come close to the things that Exchange does.”

Perhaps Microsoft should worry, though, with the rise many other companies that are piecing together software to create a new program following Zimbra’s example. The companies are created and manned by software hobbyists who will work for little or no pay, they just enjoy surfing the net. The programs are then sold commerically online, saving money in marketing and sales, as opposed to Exchange’s newest program which took 400 Microsoft employees years to create.

By 2004, Zimbra had generated a profit of $4 million and spent it on purchasing a Silicon Valley office for their ten employees. They later received $30.5 million in venture funding; using a portion of the money in 2005 to purchase sponsored links on Google, which would redirect queries to their program.

Zimbra grew in leaps and bounds thanks in large part to the people who contributed to it for free, such as Carlos Vidal, who updated Zimbra’s coding to help translate the site. Now Zimbra offers it’s program in 13 different languages including English, Spanish, German, and Swedish.

Zimbra’s most notable achievement to date came when tax giant H&R Block purchased Zimbra and implemented it into 12, 000 of its branches nationwide. Microsoft has stepped up efforts to convince the company not to drop Exchange all together, and H&R Block is weighing their options carefully.

With all the success it seems that the make shift company has received so far, the creators of Zimbra say that their biggest is fear is that a company will follow their example, but create a better product. “The thing we worry the most about,” says Dharmaraj, “is that somebody’s going to copycat everything we’ve done in the last year.”

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Autmn Davis is a staff writer for WebProNews covering ebusiness and technology.